A military spokesman said the deadline to completely free Marawi of armed elements cannot be met because militants had taken civilians as hostages, using women and children as human shields.
The general leading an offensive against Daesh-linked militants holed up in a southern Philippine town has been relieved of his command, an army spokesman said on Friday.
He further said removal of Brigadier-General Nixon Fortes as commander of the army brigade in Marawi City and his replacement by his deputy, Colonel Generoso Ponio, was not related to the battle that has raged in the city.
Fortes was appointed commander of the army's 103rd Brigade in January and oversaw a series of operations on the island of Mindanao to disrupt the Maute, a group that has sworn allegiance to Daesh.
A military source, speaking on condition of anonymity, said Fortes was dismissed because all his forces were not in the city when the rebels began their rampage, even though military intelligence had indicated that militants, including foreign fighters, were amassing there.
The source said that some of Fortes' forces were busy fighting a small band of communist insurgents in a nearby town when some 400 militants overran Marawi City on May 23, after a botched military raid to capture their leader, Isnilon Hapilon.
Thirty-nine members of the security forces have been killed in the Marawi City battles, as well as 19 civilians and 120 rebel fighters.
On Friday, Philippine planes dropped bombs and helicopters delivered rockets on militant positions.
Several buildings were set alight as the military tried to flush out about 100 fighters to meet a deadline set by Defence Secretary Delfin Lorenzana to re-take the city of 200,000 people by the end of the day.
"I don't think we can meet the deadline to completely free Marawi of every single armed element on every street," military spokesman Restituto Padilla told reporters.
He said the operations were slow because militants had taken civilians as hostages, using women and children as human shields in fortified commercial buildings in the city centre.
Last week, Philippines President Dutere appealed to Muslim separatists and the Maoists to join the government fight against the Daesh-linked militants.